Molly Ivins May 11AUSTIN, Texas — The banks had a great week in Congress last week; it's just the rest of you who got shortchanged. If you had the combined political clout of the banks, the insurance companies and Wall Street, you wouldn't have gotten it in the neck — your elected representatives in Congress would have voted in your interest instead of your banker's interest. Just another little reason to be in favor of public campaign financing. Banks, stockbrokers and insurance companies have been separated by law since the Great Depression. Sen. Phil Gramm of Texas would change that with a bill that will not only touch off another wave of massive mergers but also 1) frees banks from some regulation by the Treasury Department and 2) frees brokers from regulation by the Securities and Exchange Commission. In addition, the Senate bill dilutes requirements that banks make loans in minority communities and to farmers and others who have little access to credit. The Community Reinvestment Act has encouraged billions of dollars in lending to inner cities and farmers during the past 22 years, stimulating a renaissance in many inner-city neighborhoods. The Gramm bill guts that. Treasury Secretary Robert Rubin has criticized the provisions that reduce his department's oversight of banks and the new financial conglomerates. Fed Chairman Alan Greenspan opposes the House version of the bill because it would permit banks to use operating subsidiaries to sell insurance and securities. SEC Chairman Arthur Leavitt says the legislation undermines protections for investors and is "a real danger to investors." But why would any congressman pay attention to those three? They don't make big campaign contributions. The rationalization for all this is that our banks need to compete in the global marketplace. Even though the bill clearly encourages an orgy of bank mergers, Gramm predicts confidently that it will produce cheaper financial services all over the country. How we look forward to it. In another happy chapter for banking, Americans will now find it much more difficult to declare bankruptcy. That's because you don't make campaign contributions as big as the consumer credit industry's. Hello, sucker. The credit industry is concerned because 1.4 million personal bankruptcies were filed last year, although the Consumer Federation of America said that filings actually declined in January and February and rose at a relatively modest 1.5 percent in 1998. Nevertheless, the credit industry got everything on its wish list in the House bill passed last week. The cry in the House was that consumers must take "personal responsibility" for their debts. No one seems anxious to make the credit card companies take personal responsibility for the fact that they pushed 4 billion unasked-for credit cards on consumers last year alone. Stephen Brobeck, director of the Consumer Federation, said that without realizing what is happening to them, many people end up without savings and with debt service that consumes 30 percent, 50 percent or more of their incomes. Then, any illness or period of unemployment pushes them into bankruptcy. Under the House bill, anyone who earns more than the median income and has the ability to make at least $6,000 in payments over five years would not be able to have his debts forgiven. The bill relies on a rigid formula, based on the expense allowances of the Internal Revenue Service, to decide "reasonable living expenses" for debtors in bankruptcy. Rep. Henry Hyde, of all people, pleaded to give bankruptcy judges more discretion: "I'm as capitalist as anybody, and I'm as conservative as anybody. But it doesn't seem to me that giving some flexibility to someone in bankruptcy is a renunciation of one's conservative standards." He added sarcastically, "Let me also pay my respects to the creditor lobby. They're awesome." However, Texas' own Dick Armey then rose to speak against such flexibility, urging members to impose "legislative discipline on judges." Under the legislation, credit card companies will be able to receive repayment of debt at the same rate as debts like child support — they will have an equal priority with child support. Rep. Bill Delahunt of Massachusetts told The New York Times, "This bill, in effect, would turn a taxpayer-funded system, the bankruptcy court, into a new collection instrument for credit card companies." The bill also restricts class-action lawsuits, brought in the past, accusing banks of hard repayment agreements. But you'll be happy to know that the bill does not close loopholes in the current law that protect the wealthiest debtors. This land was made for you and me. Molly Ivins is a columnist for the Fort Worth Star-Telegram. To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. 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